New York State Life Insurance Exam Questions Practice Question
A trust may NOT be used in connection with a new life insurance policy when the intent is to
Correct Answer: B
Rationale: Using a trust in conjunction with a new life insurance policy is not permissible when the intent is to conceal financing arrangements, as this undermines transparency and regulatory compliance.
Option A is acceptable because naming a trust as the beneficiary while having another party as the policyowner is a standard practice.
Option C is also valid; trusts can be structured to specify beneficiaries and can include or exclude individuals as desired.
Option D is a legitimate reason for using a trust, as it can effectively minimize estate taxes, aligning with estate planning goals.
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